Lawmakers say retired feds, government paying double for drug coverage

More than 200,000 federal retirees may be enrolled in two overlapping prescription drug programs at a cost of as much as $200 million annually due to a lack of coordination between the Office of Personnel Management and the Centers for Medicare and Medicaid Services, said two Democratic congressmen on Monday.

"The reason for requiring this coordination is obvious," House Oversight and Government Reform Committee Chairman Henry Waxman, D-Calif., and Federal Workforce Subcommittee Chairman Danny Davis, D-Ill., wrote in May 12 letters to OPM Director Linda Springer and Kerry Weems, CMS acting administrator. "Without it, the retiree would be paying twice for the same coverage. This would enrich the private insurers at the expense of the retiree, and in the case of Medicare Part D and [the Federal Employees Health Benefits Program], where coverage is subsidized by the government, the taxpayer."

OPM spokesman Mike Orenstein said the agency would not comment on the letter until Springer sent a formal response to Waxman and Davis.

The lawmakers said in their letters that an April 21 briefing OPM held for House staff on proposals for FEHBP prompted their response.

"At this briefing, OPM indicated that they were aware of over 200,000 federal retirees who were enrolled in both FEHB plans with drug coverage and Medicare Part D drug plans," they wrote. "OPM officials also indicated that there was no ongoing coordination between the two programs, explaining that in most cases, Medicare Part D plans and FEHB plans were not even aware of whether the retirees were enrolled in both programs. In follow-up conversations, officials at CMS confirmed these figures and indicated that there was virtually no coordination between the two programs."

Waxman and Davis said CMS officials told them that the benefit plans of the National Association of Letter Carriers, SAMBA, Government Employees Hospital Association and the Mail Handlers coordinate Medicare Part D and FEHBP drug coverage to avoid duplicative benefits. Those plans include more than 20 percent of federal retirees.

Many FEHB plans offer a disclaimer about prescription drugs, noting that their coverage is equivalent to that of Medicare Part D and instructing participants that they don't have to enroll in the latter program and pay extra for the benefit. Those disclaimers say employees can choose to enroll in both forms of coverage and the FEHB plan and Medicare will coordinate benefits coverage.

Waxman and Davis asked Springer and Weems to provide them with a timeline by May 16 for improving coordination between their agencies and to clarify how dual coverage affects federal employees. The lawmakers signaled that they did not expect their inquiries to end after receiving that information from OPM and CMS.

"This information raises basic questions regarding waste and abuse of retiree and taxpayer funds, which the committee will be investigating," Waxman and Davis wrote.